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FRANCHISEES:
Industry sector backgrounds
and declared areas of interest
David Purdy
Professor John Stanworth
International Franchise Research Centre Special Studies Series Papers 1-16 Web Versions 2010 p.1
LIABILITY DISCLAIMER 10 London: A Capital City For Franchisee
Recruitment, (Mills, Stanworth &
The information and analysis in each report Purdy), 1997
is offered in good faith. However, neither the
publishers, the project sponsors, nor the 11 The Effectiveness of Franchise
author/s, accept any liability for losses or Exhibitions in the United Kingdom,
damages which could arise for those who (Chapman, Mills & Stanworth), 1997
choose to act upon the information or
analysis contained herein. 12 Franchising: Breaking Into European
Union Markets, (Stirland, Stanworth,
IFRC Special Studies Papers 1993-2001 Purdy & Brodie), 1998
5 The Blenheim/University of
Westminster Franchise Survey: A
Comparison of UK and US Data,
(Stanworth, Kaufmann & Purdy), 1995
6 Developing a Diagnostic
Questionnaire as an Aid to Franchisee
Selection, (Stanworth), 1995
7 Franchising as a Source of
Technology-transfer to Developing
Economies, (Stanworth, Price, Porter,
Swabe & Gold), 1995
International Franchise Research Centre Special Studies Series Papers 1-16 Web Versions 2010 p.2
INTRODUCTION BACKGROUND TO THE SAMPLE
Our first Special Studies Series report, Paper Blenheim Exhibitions and Conferences
No.1, explored key characteristics associated Limited organise two National Franchise
with the employment status of potential Exhibitions. The first of these, in the Spring, is
franchisees. The analysis contrasted those held at Olympia (London), and the second, in
having a self-employed background against the Autumn, at the National Exhibition Centre
those without such experience. (Birmingham). Each attracts around 10,000
paying visitors, a large proportion of whom
For that study, the sample was based on supply a completed registration card
some 300 face-to-face interviews of potential questionnaire on entry.
franchisees who were visiting a franchise
exhibition held in London, during Spring 1993. An entrance fee in the region of £10 is levied
Several issues were investigated, including and previous research shows that many
the main purpose for visiting the exhibition, people travel considerable distances to attend
the likelihood of buying a franchise, the main the exhibition. These suggest that the act of
appeal of franchising and the availability of attendance is usually not undertaken lightly
finance. and is probably a useful gauge of serious
intent.
The effective and efficient targetting of
potential franchisees is a key issue in the
industry - with special reference to the THE SAMPLE
challenge of raising conversion rates and
reducing the unit cost per successful The analysis presented here is based on data
recruitment - and it was felt that a breakdown collected at the Spring National Franchise
of declared sector interests against current Exhibition, held at Olympia on 26-28th March,
activities would help to build upon the analysis 1993, which attracted 9,368 visitors.
presented in our first report.
Our sample relates to 5,114 registration card
questionnaires - some 55% of the total
number of visitors - representing a very high
sampling rate when compared with most
surveys, which significantly reduces the error
component associated with absolute sample
size.
Visitors were asked to identify the capacity in The sectors for current involvement were:
which they were visiting the exhibition, and the
options offered were: ❏ Automotive
❏ Building/Maintenance
❏ Potential franchisee ❏ Business services
❏ Existing franchisee ❏ Education/Training
❏ Potential franchisor ❏ Financial
❏ Existing franchisor ❏ Food/Catering
❏ Potential master licensee ❏ Health/Leisure
❏ Consultant ❏ Legal
❏ Printing/Publishing
Areas of Interest ❏ Retail
❏ Sales & Marketing
The options for areas of interest were: ❏ The Forces
❏ Automotive Figure 1 indicates the response rates for
❏ Beauty/Fashion each area of interest sector ('target' sector),
❏ Building/Maintenance calculated as a proportion of the total number
❏ Business services of potential franchisees in the sample. For
❏ Distribution/Delivery Service example, 2,185 (i.e. 60%) of the sample's
❏ Fastfood/Restaurant/Catering 3,619 potential franchisees recorded that they
❏ Health/Leisure had a 'General interest in franchising'.
❏ Interiors/DIY/Security Figure 2 presents the previous distribution in
❏ Laundry/Dry cleaning/Cleaners terms of current sector activity - the total
number of potential franchisees falling in each
❏ Printing/Photography
sector is shown in parentheses, e.g. (2,185).
❏ Retail shops
Figure 3 illustrates the extent to which
❏ Workshop consumables multiple selections were recorded.
❏ General interest in franchising
50%
45%
40%
35%
Proportion
of
30% Sub-sample
(Sector of Interest)
25%
n=3,619
20%
15%
10%
General interest in franchising = 2,185
Fastfood/Restaurant/Catering = 711 5%
Business services = 708
Retail shops = 705 0%
Health/Leisure = 566
Distribution/Delivery Service = 526 No sector
B/Services (719)
Printing/Photography = 372 Sales (540) (571)
Automotive = 312 Retail (410)
Financial
Building/Maintenance = 271
Building (371)
Sector(s) of Interest Beauty/Fashion = 266 Food (306) (341)
Interiors/DIY/Security = 245 Health (238)
Automotive Current Sector(s)
Laundry/Dry cleaning/Cleaners = 167 (226)
Education
Workshop consumables = 129 Printing (165)
The Forces (135)
Legal (52) (102)
Fig 3 - POTENTIAL FRANCHISEES: SECTOR INTEREST vs. CURRENT SECTOR
Extent of multiple selections
69%
70%
60%
26% Food/Catering
16% No current sector
15% Retail
14% Business Services
12% Sales & Marketing
10% Financial
9% Health/Leisure
9% Building/Maintenance
5% Automotive
5% Education/Training
4% Printing/Publishing
2% Legal
2% The Forces
Figures 4 to 15 present a breakdown of the target sector that can be attributed to each
individual sectoral (target) interests in current sector, and figure b recalculates
Figure 1 (and Figure 2) against the current each current sector response as a proportion
sectors of those expressing such interests. of the total number of potential franchisees
identifying themselves with the respective
Each figure has two charts: figure a indicates current sector. N.B. Some people identified
the proportion of the overall interest in the themselves with more than one sector.
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
28% Retail
17% No current sector
16% Business Services
16% Sales & Marketing
11% Financial
10% Food/Catering
7% Building/Maintenance
6% Health/Leisure
5% Automotive
4% Education/Training
4% Printing/Publishing
2% The Forces
2% Legal
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
38% Automotive
17% No current sector
15% Sales & Marketing
13% Business Services
10% Building/Maintenance
9% Retail
8% Financial
6% Health/Leisure
5% Food/Catering
4% Printing/Publishing
3% Education/Training
3% The Forces
2% Legal
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
48% Building/Maintenance
15% No current sector
14% Business Services
11% Sales & Marketing
8% Automotive
7% Financial
7% Food/Catering
7% Retail
4% Health/Leisure
3% Education/Training
2% The Forces
2% Legal
2% Printing/Publishing
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
22% Building/Maintenance
19% No current sector
19% Sales & Marketing
13% Business Services
13% Retail
9% Financial
7% Health/Leisure
6% The Forces
5% Automotive
4% Food/Catering
4% Education/Training
2% Printing/Publishing
2% Legal
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
Note: 1. 'Respondent' = 'Potential Franchisee' (the sample comprises 3,619 potential franchisees)
2. A minor proportion of the respondents identified themselves with more than one current sector
(if each respondent had selected only 1 current sector, then the corresponding percentages in figure 'a'
would total exactly 100%)
However, when the responses are calculated The source data - of visitors to a franchise
as a proportion of the total number of exhibition - allows us to suggest various
potential franchisees presently belonging distributions of sector interest against current
to a given current sector, a different picture sector background for potential franchisees.
emerges, as indicated by each 'b' figure. However, if we use a simple model, such as
the one shown in Figure 16 (below, based on
Thus Figure 15b also provides a breakdown of a traditional approach to selling), whereby the
those interested in Workshop Consumables, conversion to a franchisee involves a number
except that the percentages here refer to the of stages progressing from a larger
total number of potential franchisees in each population, reducing in size at each stage as
current sector. The highest response rate the final goal is approached, then our sectoral
came from the Automotive sector, where 10% analysis could be seen as relating to the
John Stanworth is the director of the The International Franchise Research Centre
International Franchise Research Centre (I.F.R.C.) is committed to improving the
and has been engaged in research into understanding of franchising. This is achieved
franchising since the mid-1970s. He also by the publication of impartial research and by
leads the Future of Work Research Group, the encouragement of informed debate.
based at the University of Westminster, which Membership is suitable for anyone with an
has a record of specialist research in interest in franchising and further details are
Teleworking, Small Business Development available from the address on the rear cover.
and Human Resource Management. Studies
have been undertaken for many clients,
including The Department of Trade & SPECIAL STUDIES SERIES
Industry, The Department for Education and
The Economic & Social Research Council. Papers in the Special Studies Series are
supplied free of charge to I.F.R.C. members
David Purdy is a researcher supporting the and are published a minimum of four times a
Future of Work Research Group. He has year. They report upon a range of issues
specialised in small business research since which are felt to be of interest to the
1985, and publications include authorship of franchising community. Subject matter
'Risk Capital for Small Firms', commissioned includes the findings of surveys of franchisors,
by the Small Business Research Trust. He franchisees, and potential franchisees, and
has also co-authored studies investigating also special interest matters, such as finance
Small Business Management Development for franchising.
and Teleworking.